Seasoned Gold Investors Tend to Focus on Longer-Term Results

While many new metals investors purchase gold with the anticipation of making a quick profit, and some do, most seasoned metals investors invest for the long run. Some reasons why seasoned metals investors acquire gold for the long run are outlined below.

Gold is Considered a Premier Safe-Haven Asset

Perhaps one of the more salient reasons for investing in gold for the long run is gold’s reputation as a premier safe-haven asset. Gold is divisible, durable, portable, does not deteriorate in an economic crisis and is recognized world-wide as a medium of exchange. As a result, many experts, such as Ray Dalio (see his “All Weather Portfolio”) consider gold to be an essential part of a well-diversified portfolio using the premise of diversifying your investment across different asset categories in an effort to reduce overall risk, and to achieve consistent returns over the long run.

Central Banks Continue to Stockpile Gold

Gold plays a key role as a reserve asset for the world’s central banks (The Fed, ECB, BoE, BoJ, SNB, etc.). Gold is the third highest reserve assets that central banks own. As long as central banks use gold as a tool to help achieve their responsibility to, gold will maintain its supremacy as a dominant asset class. Ray Dalio, the founder of the largest hedge fund in the world (Bridgewater Associates) has stated, in support of holding gold as part of a diversified portfolio, “I have a strong preference for holding those things which central banks are going to want to hold and exchange value in when they are trying to transact.” Ray Dalio’s net worth is estimated to be $17 Billion. His perspective is probably worth some strong consideration.

Gold’s Long-Term Performance Throughout Cycles of Economic Volatility

According to the World Gold Council, gold has had an “average annual return of 11% in US dollars over the past 50 years.” Take note that, during that 50 year period, we experienced both the longest expansion of economic growth in American history (1990s), as well as the 1973 oil crisis, the 1979 oil crisis, the 1980s double dip recession, the dot-com bubble, 911 attacks, the Great Recession (sub-prime mortgage crisis and collapse of the U.S. housing bubble, collapse of Bear Sterns, Lehman Brothers, AIG, etc.), and the COVID-19 Recession. If the past is any indication of future performance, gold would be a strong consideration for anyone’s personal investment portfolio.

Prospective investors often presume they must make large acquisitions to get involved in the metals market. Not true. Many of our clients make small acquisitions, a budgeted dollar amount, a coin, or even a fraction of a coin via our ACCRUE subscription program, on a monthly basis. With the spot price of gold having increased more than sixfold over the past two decades, it may prove prudent to just bet on yourself today an get involved at a level that meets your personal budgetary parameters.

Maybe it is time to consider the adage, “Don’t wait to buy gold, buy gold and wait!

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